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from their loan agreements on the ground that the loans reflected
therein were not as documented. Petitioners have not acted in
accordance with what they argue is the substance of the loans.
Rather, petitioners freely admit the purpose of the corporate and
plan loans was to permit Dura-Craft and Springbrook to escape the
imposition of the excise tax pursuant to section 4975.
Petitioners now seek relief from the unforeseen tax consequences
arising from the misrepresentation they deliberately perpetrated.
Petitioners may not disavow their chosen form of the loans
on the belated assertion that the entire loan transaction was
fictitious and was designed to avoid the prohibited transaction
provisions of section 4975. "One should not be garroted by the
tax collector for calling one's agreement by the wrong name",
Pacific Rock & Gravel Co. v. United States, 297 F.2d 122, 125
(9th Cir. 1961), but to allow petitioners "to disavow their prior
representations, under such circumstances would invite similar
intentional deceit on the part of other taxpayers seeking to gain
a tax benefit", Cluck v. Commissioner, 105 T.C. 324, 332 (1995);
Lefever v. Commissioner, 103 T.C. 525, 544 (1994), affd. 100 F.3d
778 (10th Cir. 1996). Having determined that petitioners may not
disavow the form of their loans, we turn to consider the tax
consequences flowing from that form.
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